- BTC and other assets that cumulatively make the cryptoverse are usually volatile
- HODLers seek opportunities to create wealth using their idle BTC.
- KB Crypto mitigates risks, puts idle BTC to use, and diversifies one’s portfolio in a unique way
No two assets are the same, and no two investors are identical. In the cryptoverse, Bitcoin is the leading asset, but from meme tokens like Dogecoin to gaming tokens like Axie Infinity, all come with their own unique aspects. In the same breath, it can be said that different investors deploy their own unique strategies to create wealth.
In the crypto market, one may be looking at quick capital gains by the liquidation of assets in the short term. But there is a very strong sentiment -- hold on for dear life (HODL) -- among many crypto enthusiasts. KB Crypto, a Canadian hedge fund with a strong track record, caters to needs of the latter category of crypto investors. The fund uses idle BTC holding, or ‘HODLing’, to create wealth in the short term.
BTC and volatility
BTC is not the only volatile asset in the world. Stocks listed on the world’s biggest exchanges can also be volatile and so can be precious metals and fiat currencies.
However, at the same time, it is also true that BTC or other crypto assets are comparatively a little more volatile in price terms. BTC can gain or lose in double-digit percentage over a very short span of time.
Can KB Crypto add to returns during volatile sessions? The fund claims it parks cash in mainstream investment instruments like commodities. That BTC you hold is just parked in say copper or some other commodity, the price appreciation is booked, with returns credited to your account in the form of BTC.
KB Crypto’s hedging strategy can be of great value when BTC and other assets of the crypto world are passing through a price correction phase, like the one we are currently seeing. Instead of liquidating the asset and settling for low returns, BTC can be put to use in KB Crypto’s fund.
HODL is a very strong sentiment across the world, but it has yet to withstand the test of time. What if BTC and other crypto assets fail to appreciate as much as HODLers are anticipating?
KB Crypto’s model of utilising the idle BTC to hedge using a traditional asset makes perfect sense. Instead of keeping the BTC locked and anticipating its appreciation in the longer run, some consider it to be a better idea to use idle BTC funds in hedging. Commodities like copper and indices could have a different price trajectory when the broader market is subdued. KB Crypto’s proprietary software works to identify variable-return assets that can be quickly liquidated to book profits.
This strategy mitigates the risk of volatility in BTC, besides letting enthusiasts tap options that can create wealth to provide cushioning against rising inflation in Canada and elsewhere.
Image source: Screen Grab KB Crypto PPT
The fund focuses squarely on how to add to the portfolio of HODLers. This it does by tapping unrelated, traditional assets like commodities. Profits are booked and returned to clients in the form of BTC. Risk mitigation using in-house proprietary software adds value to this hedging strategy.
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